With Toronto’s condo market still running on a full boil, it was only a matter of time before some unlucky buyers got burned.

CityNews reported Friday that Centrust, the developer behind a proposed hotel and condo project north of Toronto’s busy Highway 401, has allegedly skipped town with roughly $12 million in buyers’ cash. The story is still unravelling, but it appears the units first went up for sale in 2010, and Centrust later filed for bankruptcy without telling any of the purchasers. Now the company’s principals can’t be located, with some speculating they’ve left for Korea. All that remains is an empty lot and a bunch of angry people.

While real estate deposits are typically held in a trust account, at least one of the developer’s lawyers has also filed for bankruptcy. Police are investigating, although it’s unlikely the buyers will get their money back—at least not all of it. Buyers put down anywhere from $20,000 for condo units (the maximum covered by Ontario’s new home warranty corporation, Tarion) to $600,000 for commercial space.

The debacle should be a red flag for anyone eager to jump into the frothy condo market in cities like Vancouver, Calgary and Toronto, where gleaming new projects with tantalizing amenities—juice bars, splash pools—seem to pop up every week. All that money sloshing around is bound to attract inexperienced and, possibly, unscrupulous operators, with many experts saying the industry largely remains a “wild west” in Ontario when it comes to regulation.

For a glimpse of how a seemingly run-of-the-mill condo project went so wildly off the rails, check out the Centrust discussion on the UrbanToronto forum. Keep in mind that it’s full of speculation and allegations that may not be true. Still, here’s a sampling of posts that appear to shed light on the tale.

Back in 2009, it was mostly a discussion of unit layouts and how the price stacked up to other nearby projects. A post by someone going by the name MadMax was typical:

“What I like about this condo is that the one bedroom and den has two bathrooms and some are full baths so you get a shower and a bathtub. The price of this condo is set at the same price as the resale condos around the area. I find that really attractive.”

However, others were already warning people to tread carefully because Centrust had no track record. Another poster, Solaris, wrote:

“…the builder for this project is Centrust Development, which sounds like yet another unknown ‘one project’ developer … so purchasers in this project should be aware of the risks involved (although the regular consumers don’t look into these things and only complain later).

By the following year, before the units had gone on sale to the public, some were already worrying about the developer living up to its promises. PinkLady wrote:

“I was called to sign the Agreement of Purchase of Sales, the price is 15% higher than the ICA [a document the developer called the 'Investor Commitment Agreement] I signed.”

And by 2014, it’s become clear there’s not only no condo project, but the developer seemed to have gone missing, too. A poster named ezyt wrote:

“This is very frustrating. I went to “Centrust Group” office (address: 1125 Finch Avenue West) and there is no office; they have supposedly left the location months ago and nobody can get a hold of them.”

Browse

Advertisement

About this author

Chris Sorensen is a senior writer, covering business and financial news. He has also written about the growing number of deadly airline disasters caused by confused pilots, and about sandwiches. Both stories were nominated for a National Magazine Award.

Advertisement

Post navigation

The tale of a failed Toronto condo project raises red flags

Yep, people being screwed and if our govmints worked for us, its all easily avoidable.

First off Ottawa statism wants control of securities, yet give us no faith as they can’t process simple fraud like this. Nor do they have consumer protection laws like US has. For if our bickering for our money politicians cared, all these purchases would be setup in trusts by law. And the trustees need to be arms length, pay out only on completion of work.

But hey, Ottawa is about illusions for our money, all talk, no action. In reality, RCMP should have a Interpol arrest warrant out, work with where the money trail went and confiscate it.

And Wynne is worried more about union cards. As the province could do this, but union cards in “consumer protection” is about inept incompetence and consumption of tax dollars.

Notice: Your email may not yet have been verified. Please check your email, click the link to verify your address, and then submit your comment. If you can't find this email, access your profile editor to re-send the confirmation email. You must have a verified email to submit a comment. Once you have done so, check again.

Sign In / Sign Up

With your existing account from

With an email account

Commenters who signed up before June 26th, 2014 will have to reregister on our new, social-friendly login system. The good news? The process should only take a few minutes, and you're welcome to use the same email address.

Almost Done!

Please confirm the information below before signing up.

{* #socialRegistrationForm *}
{* socialRegistration_firstName *}
{* socialRegistration_lastName *}
{* socialRegistration_emailAddress *}
{* socialRegistration_displayName *}
By clicking "Create Account", I confirm that I have read and understood each of the website terms of service and privacy policy and that I agree to be bound by them.